The Impact of Aging on Cognitive Function

An article by Justin Fox for Bloomberg discusses a 2009 study by David Laibson, Sumit Agarwal, John C. Driscoll and Xavier Gabaox that found that cognitive function peaks at age 53 and starts to decrease rapidly, on average, for people in their 70s. The four economists examined the fees and interest rates paid by thousands of borrowers in 10 different types of credit transactions and found that, on average, such costs were minimized at age 53.3.

As more members of the baby-boom generation start moving into their 70s, this data takes on special significance.

The Center for Retirement Research at Boston College has a summary of the study here.

Over the last several years, AAII has covered the area of aging and its impact on investor abilities:

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Wayne A. Thorp, CFA, is the senior financial analyst and a vice president at AAII. He has written extensively on the topics of technical analysis, quantitative stock selection, stock valuation and analysis, and technology. He is the program manager for Stock Investor Pro, AAII's fundamental stock screening and research database programs. Wayne is also the lead analyst and product manager for AAII's Stock Superstars newsletter and serves on the investment committee of the Dividend Investing newsletter. He has worked at AAII since 1997.